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Traditional banks have a rough time embracing digital

(Image credit: Image source: Shutterstock/MaximP)

The world may be going increasingly digital, but traditional banks are failing to keep up, allowing new challengers to close the gap, new research has claimed.

A report by P.A.ID strategies, analysing s how traditional banks are handling the overall digital transformation of the world found that of the 10 UK big banks, the majority still requires people to go through a manual process, like visiting a bank, to open a digital bank account.

Mobile-bank first Starling scored highest, with its identity verification and account activation processes being praised. HSBC, on the other hand, scored lowest. RBS is the only incumbent bank that allows digital proof of identity submission, but not via tablet or smartphone.

“We were surprised to see so few traditional banks had made progress towards a 100 per cent digital experience through the mobile channel. Many failed to offer a fast, secure and digital account application and activation process, including verification of the applicant’s identity. This means the banks aren’t truly digital, degrading the user experience at first point of contact and increasing the chance of abandonment," said John Devlin, author of the report and principal at P.A.ID Strategies.

The report looks at the entire process, from signing up for an account, to actually being able to make a transaction. Barclays has scored lower than its competitors due to 'archaic processes such as waiting documents in the post and delays in sending cards and PINs'.

Banks are also forced to comply with AML and KYC regulations, adding more strain. The majority have failed to use digital identity services like biometrics, the report concluded.

You can find the full scorecard on this link.

Image source: Shutterstock/MaximP